More and more people in Russia say that the country’s political system should be modernized. Sberbank (Saving Bank) Head Herman Gref said last Wednesday at the Strategy 2010 conference that political competition should change the executive power’s sway on Russia’s road to modernization. It will be recalled that Gref, who was Minister of Economic Development in almost all the years of Vladimir Putin’s rule, is widely believed to be the Strategy’s mastermind.
According to the Sberbank head, the economy should be reformed in two stages. He thinks that Russia still has the potential “to implement the first stage,” when reforms can be carried out via parliament. At the same time, Gref emphasized that it is impossible to create a complete economy without further development of political institutions. “[The economy] requires totally different political institutions, such as freedom of speech, which has a direct impact on economic growth rates; maximal diversification of ownership; maximal withdrawal of the state from ownership; and competition, including political competition, which reduces the likelihood of errors in the difficult choices between one course of reforms or another,” Gref believes.
The Sberbank chairman noted that the influence of Strategy 2010’s developers was declining as the Stabilization Fund was rising and budget revenues exceeded expenditures. Here is his comment on the political consequences of the “affluent” petrodollar years: “After people started to be paid stable wages and achieved a certain level of wellbeing, it is very difficult to push through any unpopular things, and public consensus is narrowing.”
In Gref’s view, the crisis brought along new chances to implement a new stage of reforms, as the erstwhile level of budget revenues is not expected to rise again. The economist is certain that the first thing to do is to reform education and political institutions. “It is possible to build any number of development institutions without competition, but this will produce no effect on the economy,” he stressed.
The Day requested Sam GREENE, Deputy Director of the Carnegie Moscow Center, to comment on the Russian Saving Bank head’s statement and point out whether the current Russian elite is interested in political modernization.
“This is not the first time Gref is speaking about the necessity of political modernization. Medvedev also wrote on this in his article ‘Russia, Forward!’ The president supported this call rhetorically more than once. Business circles may be speaking more loudly of this, but these are not new ideas. The problem is that economic and other elites would like to see political reforms carried out in such a way that there are no essential changes in their own situation. There are no guarantees in a system of total freedom of political and economic competition. In the current system, the positions of almost every strong player are absolutely guaranteed if only in relative values. And this means that everyone may potentially lose out on any progress of the reforms.”
The entire ruling elite are interested in the preservation of the status quo. How then can one find stimuli for the country’s development?
“Yes, indeed, this is a paradox of sorts. Everyone is aware of the necessity to change the system. Everyone is aware that the current system of economic and political management, which are often interrelated (Gref is, of course, right in this), is inviable in the medium- and long-term prospect. But still every individual feels quite good at the moment. And the task of every individual is to understand how one can change this setup in such a way that they do not stop feeling good.”
Russia’s President Dmitry Medvedev spoke at the latest Russia-EU summit, first of all, about the technological side of cooperation in modernization, whereas the European Commission President Jos? Manuel Barroso linked the technological aspects of modernization with sociopolitical ones, and emphasized that “modernization is not only about the economy but also about society, rule of law, and, in general, changes in certain values.” What will you say to this?
“The task of the Russian side in its relations with Europe, in the so-called Partnership for Modernization, is to obtain as many financial, technological and managerial resources as possible. This would allow it to ride out the crisis more or less uninjured, continue to function, and gradually improve effectiveness. Naturally, Europe can invest in Russia’s modernization. But it is absolutely unclear for them if this process will indeed produce any essential long-term political or economic changes. There is still a danger that, once the crisis is over, they will relax a little, stop thinking about reforms, and go on living as before. Then we will soon face a new, perhaps more acute, crisis.”
Mr. Greene, can Brussels push the Russian leadership to political reforms?
“Brussels could exert a stronger influence on Russian policies if they could more effectively define their own policy. Europe is now lacking a vision of what they would like to see from partnership with Russia. In the long term, the EU would like to see Russia integrated and in fact indistinguishable from a European country. It is not about Russia’s membership in the EU, but there must be as much integration and similarity as possible. But there is no understanding of how to achieve this. For this to occur, EU countries should blend their policies into a more or less common foreign policy, thus creating more economic and political integration within the EU itself. Only then can they patiently and intensively invest their economic and political capital in the relations with Russia. This understanding is perhaps sometimes present in Brussels and other European capitals. But at the moment they are not prepared for such political and economic investments.”
Do you think Russia is likely to have an alternative movement and a new leader who is not only capable of just talking about the necessity of political reforms but is also determined to implement them?
“I can see the likelihood of a movement like this. But I cannot say who will be at the head of this movement. You have mentioned Gref as a likely leader of this movement. The problem is that the name of anyone who was in charge of economic policies for some time, even in the Putin government, has been finally and irreversibly compromised in the eyes of the Russian people. And this only guarantees unpopularity – from Gaidar to Kudrin, and, of course, including Gref.”
Our newspaper once interviewed Adam Michnik who said that nobody had thought that Mikhail Gorbachev, a Stavropol apparatchik, could open the door to freedom. Do you think Medvedev can become this kind of apparatchik in today’s Russia?
“Yes, anybody can be this kind of apparatchik. The problem is not in the apparatchik but in those who surround him. And Gorbachev could not have done so without allies, without an understanding in his inner circle, in rather wide elite strata, and among the masses that something should be changed. In the late Soviet era, the system was in worse economic straits. Everybody in today’s Russia, in the elite and in the masses, remembers only too well that his reforms ended in the collapse of the country. Therefore, many are not sure that one will be able to change the system and retain Russia at the same time. Let us not forget that Gorbachev wanted to change many things but not everything. His task was to keep the country and the political system intact to a large degree. He failed to do so.”
